Several policy proposals and changes have created uncertainty for federal revenue for K–12 schools. This essay looks at school-district-level data on specific federal funding streams—including title revenue, revenue for students with disabilities, and school-based nutrition revenue—to understand how these funding sources are correlated with district characteristics and staffing per pupil. I relate these results to previous research on how districts spend specific federal funding streams.
Why This Matters
Empirical evidence shows that increases in federal educational funding can have an impact on student outcomes. Studies of Elementary and Secondary School Emergency Relief funding show that a $1,000 increase in federal revenue per pupil was associated with increases in math scores (0.007 to 0.009 standard deviations) and in reading scores (0.002 to 0.005 standard deviations). And Title I spending is associated with various positive outcomes, including on educational attainment and adult earnings, with students from lower-income families benefiting more.
Key Takeaways
Federal revenue beyond Title I is more likely to be allocated to local education agencies (LEAs) serving high shares of students from households below the federal poverty level. Although Title I is often thought of as the federal revenue stream that supports students from low-income families, most other federal programs contain programmatic or formulaic elements that direct relatively more funding to LEAs serving higher shares of economically disadvantaged students.
Federal revenue flows differently to rural versus urban districts. Although Title V, Part B funding is specifically allocated for rural districts, other federal revenue streams are correlated with LEA urbanicity status (whether primarily rural or primarily urban). This may be attributable to the populations served and to programmatic rules that deliver relatively higher per pupil amounts to rural districts.
More federal revenue is generally associated with higher levels of nonteaching staff members per pupil, though staffing profiles vary by type of revenue stream. My analysis cannot say definitively that funding from a given federal revenue stream is supporting certain staffing positions. Broadly, LEAs that receive higher levels of federal revenue tend to spend more on staffing positions per pupil, particularly nonteaching staff positions such as paraprofessionals, student support staff, and LEA administrators.
How I Did It
For this analysis, I use the most recent available national data on school district finances, from the 2022–23 school year, along with data on district enrollment and characteristics. My analysis of the relationship between a given revenue stream and staffing per pupil is an attempt to provide a descriptive look at the extent to which LEAs that receive relatively more of a given federal revenue stream have a staff composition that is different than LEAs that receive less funding. I also look at student demographic composition and LEA characteristics. For each staffing, student demographic, and district urbanicity variable, I estimate a set of three regressions, each version weighted and unweighted for LEA student enrollment, to look at the relationship with per pupil revenue from a given federal source.
